THE falling pound could mean a summer boom for the British tourists industry, according to a New Year forecast from the Caravan Club.

For 2009 it looks like the “Great Escape” will become the “Great British staycation” as people rediscover the delights of domestic breaks at a choice of some 3,000 destinations UK-wide. Quarterly travel and tourism figures released by the Office of National Statistics show that the number of visits abroad by UK residents was down by 6% for the three month period between August and October 2008 compared with the previous quarter; and in a recent survey by VisitBritain, the majority said they would consider British holidays.

And the statistics show that although 90% of British people claim to be saving money in this tough economic climate, few plan to cut back on holidays. In light of the decrease in overseas visits, this suggests that Brits are still holidaying, but doing so without leaving the country.

Nick Lomas, Director of Marketing for the Caravan Club said, “We confidently predict that 2009 will be the year that welcomes the return of the great British holiday, something Caravan Club members have enjoyed for over a Century.”

Harley-Davidson reports 2008 results, plans lower 2009 shipments and unveils strategy for current environment

Milwaukee, Wis. (January 23, 2009) - dctmLink chronic_id='09014730805a0bad' object_id='09014730805a0bad' path='/H-D.com/Media/images/Shared/News/08Q4_earningstable.gif' edit_widget_type=content>Harley-Davidson Inc. (NYSE:HOG) reported decreased revenue, net income and earnings per share for the fourth quarter of 2008 compared to the year-ago quarter. The Company said it plans lower motorcycle shipments in 2009 and made public its overall strategy to deal with the current economic environment.       

“We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions,” said Jim Ziemer, Chief Executive Officer, Harley-Davidson Inc. “We have a clear strategy to not only deal with the economic conditions, but also strengthen our long-term operations and financial results. We are executing that strategy with confidence and conviction.” 

Fourth-Quarter and Full-Year Results
Revenue for the quarter was $1.29 billion compared to $1.39 billion in the year-ago quarter, a 6.8 percent decrease. Net income for the quarter was $77.8 million compared to $186.1 million in the fourth quarter 2007, a decrease of 58.2 percent. Fourth quarter diluted earnings per share were $0.34, a 56.4 percent decrease compared to last year’s $0.78. 

Revenue for the full year 2008 was $5.59 billion compared to $5.73 billion in 2007, a 2.3 percent decline. Full-year net income was $654.7 million, compared to $933.8 million in 2007. Diluted earnings per share were $2.79, a decrease of 25.4 percent compared to $3.74 in 2007. The full-year results are below the previously provided company guidance.

For the full year, wholesale shipments of Harley-Davidson® motorcycles were 303,479 units, an 8.2 percent decrease compared to 330,619 units in 2007. 

2009 Shipment Plan, Gross Margins
In the first quarter of 2009, the Company plans to ship between 74,000 and 78,000 new Harley-Davidson motorcycles, a 3.0 percent to 8.5 percent increase versus the first quarter of 2008. However, for the full year 2009, the Company plans to ship between 264,000 and 273,000 new Harley-Davidson motorcycles, a 10 percent to 13 percent reduction from 2008. 

“We reduced our production levels prudently in 2008, helping our dealers achieve lower inventory levels,” said Ziemer, “and we’re going to show similar discipline in 2009. That’s not only critical for the health of our business, but for our dealers’ businesses, as well.”

For the full year 2009, the Company expects gross margins to be between 30.5 percent and 31.5 percent, which compares to 34.5 percent for the full year 2008. The decrease is primarily due to an expected unfavorable shipment mix versus 2008, the allocation of fixed costs over fewer units, and expected unfavorable foreign currency exchange rates versus 2008. Given the volatility of the current economic environment, the Company also indicated it would not provide EPS guidance for 2009.

Strategy for the Current Economic Environment
The Company is executing a three-part strategy that includes a number of measures to deal with the impact of the recession and worldwide slowdown in consumer demand, with the intent of strengthening its operations and financial results going forward.

“Our strategy is focused on three critical areas: to invest in the Harley-Davidson brand, get our cost-structure right, and obtain funding for HDFS to help our dealers sell motorcycles and our retail customers to buy them,” said Ziemer.

Investing in the Brand
The Company is reinforcing its support of the Harley-Davidson brand, accelerating its ongoing marketing efforts to reach out to emerging rider groups, including younger and diverse riders. In addition, the Company will continue to focus on product innovations targeted at specific growth opportunities with its strong core customer base and new riders. 

In the U.S., the Company said its Sportster® motorcycle trade-up program is being well-received by dealers and consumers and is generating new floor traffic during the winter months. The program lets riders who already own a qualifying Sportster motorcycle, or who buy a new Sportster motorcycle, receive back the original Manufacturer’s Suggested Retail Price value when they trade up to a Harley-Davidson Big Twin or VRSC motorcycle at participating dealerships.

Outside the U.S., the Company will continue to support the product, dealer development and marketing activities which, during the last several years, have helped drive strong retail sales growth.

“Among other things, the Harley-Davidson brand stands for strength and resilience, and we’re managing the business in this economic climate in ways that we believe will build long-term value into the brand,” said Ziemer. 

Adjusting the Cost Structure
As a result of motorcycle volume reduction and the Company’s commitment to improve its cost structure, Harley-Davidson plans to:

• Consolidate its two engine and transmission plants in the Milwaukee area into its facility in Menomonee Falls, Wis.
• Consolidate paint and frame operations at its assembly facility in York, Pa.
• Close its distribution facility in Franklin, Wis., consolidating Parts and Accessories and General Merchandise distribution through a third party.
• Discontinue its domestic transportation fleet operation.

The planned volume reduction and restructuring actions are expected to result in the elimination of about 1,100 jobs over 2009 and 2010, including about 800 hourly production positions and about 300 non-production, primarily salaried positions. About 70 percent of the workforce reduction is expected to occur in 2009.

“We obviously need to make adjustments to address the current volume declines,” said Ziemer. “But we are also determined to do that in a way that will make us more competitive for the long term. Our management group will engage with union leaders, through our partnering relationship, regarding these changes.” 

On a combined basis, Harley-Davidson expects the volume reduction and changes to operations to result in one-time charges of approximately $110 million to $140 million over 2009 and 2010, and ongoing annual savings of approximately $60 million to $70 million upon completion of the restructuring actions.

Obtaining Additional Funding for HDFS
The Company said it is evaluating a range of options to provide the necessary liquidity for the wholesale and retail lending activities of Harley-Davidson Financial Services (HDFS).

“We’re evaluating options in order to obtain the necessary funding to support Harley-Davidson dealers and customers throughout the year,” said Tom Bergmann, Chief Financial Officer of Harley-Davidson, Inc. and interim President of HDFS.

Additional Detail on 2008 Results

Motorcycles and Related Products Segment – Fourth Quarter Results
Revenue from Harley-Davidson motorcycles was $1.02 billion, a decrease of $95.4 million or 8.5 percent versus the same period last year. Shipments of Harley-Davidson motorcycles totaled 76,581 units, down 4,625 units or 5.7 percent compared to last year’s fourth quarter.

Revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $152.1 million, lower by $13.1 million or 7.9 percent compared to the year-ago quarter. Revenue from General Merchandise, which consists of MotorClothes® apparel and collectibles, totaled $69.0 million, a decline of $4.4 million or 6.0 percent from the year-ago quarter.

Gross margin for the fourth quarter of 2008 was 31.6 percent of revenue compared to 35.7 percent for the fourth quarter last year. This decrease is primarily due to unfavorable shipment mix versus last year’s fourth quarter, higher product costs and the cost of the Sportster motorcycle trade-up promotion. Fourth quarter operating margin decreased to 12.0 percent from 18.1 percent in the fourth quarter of 2007, reflecting the impact of lower revenue in the fourth quarter of 2008 compared to the year-ago period.

Motorcycle Retail Sales Data
During the fourth quarter, worldwide retail sales of Harley-Davidson motorcycles decreased 13.1 percent compared to the fourth quarter of 2007. U.S. retail sales of Harley-Davidson motorcycles were down 19.6 percent for the quarter. The overall heavyweight motorcycle market in the U.S. decreased 25.5 percent for the same period.

Retail sales of Harley-Davidson motorcycles grew 0.7 percent in the Company’s international markets during the fourth quarter of 2008 compared to the year-ago period. Fourth quarter retail sales increased 1.4 percent in Canada; the Europe Region was up 3.4 percent; the Asia Pacific Region wasdown 8.9 percent; and the Latin America Region was up 28.0 percent.

For the full-year 2008, worldwide retail sales of Harley-Davidson motorcycles declined 7.1 percent compared to the prior year. U.S. retail sales of Harley-Davidson motorcycles declined 13.0 percent for the full year while the U.S. heavyweight market was down 7.0 percent for the same period. International retail sales of Harley-Davidson motorcycles increased 10.3 percent for the full year 2008.

Full year data are listed in the accompanying tables.

Financial Services Segment
Harley-Davidson Financial Services (HDFS) recorded an operating loss of $24.9 million for the fourth quarter, $63.5 million lower than the operating income in the year-ago quarter. The decrease is primarily due to a $35.1 million write-down of retained securitization interests and a $28.4 million write-down to fair value of finance receivables held for sale. The write-downs were due to higher projected credit losses and an increase in the discount rate used for the valuation of receivables.

“Our priorities for HDFS in 2009 are to continue to obtain funding for its lending activities, manage credit losses in this challenging environment and provide support to the Harley-Davidson dealer network,” said Bergmann.

Income Tax Rate
The Company’s fourth quarter effective income tax rate was 36.9 percent compared to 35.5 in the same quarter last year. The 2008 fourth quarter increase was primarily related to the tax implications of MV Agusta, which the Company acquired in August 2008.

Harley-Davidson, Inc. – Twelve Month Results
For the full year of 2008, revenue totaled $5.59 billion, down 2.3 percent from last year’s $5.73 billion.Shipments of Harley-Davidson motorcycles were 303,479 units, compared to last year’s 330,619 units. Harley-Davidson motorcycle revenue was $4.28 billion, down 3.8 percent compared to last year’s $4.45 billion. P&A revenue was $858.7 million, down 1.1 percent compared to last year’s $868.3 million. General Merchandise revenue increased to $313.8 million, a 2.8 percent increase compared to $305.4 million in the full year of 2007. 

HDFS operating income was $82.8 million, a 61.0 percent decrease from last year’s $212.2 million.

Cash Flow
Cash and marketable securities totaled $593.6 million as of December 31, 2008. Cash used by operations was $684.6 million, and capital expenditures were $232.2 million during the full year of 2008.

For the full year of 2009, capital expenditures, excluding those associated with restructuring activities, are expected to be between $180 million and $200 million. The Company expects restructuring activities to result in additional capital expenditures of $10 million to $20 million in 2009.

Stock Repurchase
The Company did not repurchase shares in the fourth quarter of 2008. For the full year 2008, the Company repurchased 6.4 million shares of its common stock at a cost of $250.4 million. On December 31, 2008, the Company had 232.8 million shares of common stock outstanding.

As of December 31, 2008, there were 16.7 million shares remaining on a board-approved share repurchase authorization. An additional board-approved share repurchase authorization is in place to offset option exercises.

Company Background
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta and Harley-Davidson Financial Services (HDFS). Harley-Davidson Motor Company produces heavyweight custom, touring and cruiser motorcycles. Buell produces American sport performance motorcycles. MV Agusta produces premium, high-performance sport motorcycles sold under the MV Agusta® brand and lightweight sport motorcycles sold under the Cagiva® brand. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson and Buell dealers and customers.

Forward-Looking Statements
The Company intends that certain matters discussed in this release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects,” “plans,” or “estimates” or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company's ability to (i) effectively execute the Company’s restructuring plans within expected costs, (ii) manage the risks that our independent dealers may have difficulty adjusting to the recession and slowdown in consumer demand,  (iii) manage supply chain issues, (iv) anticipate the level of consumer confidence in the economy, (v) continue to have access to reliable sources of capital funding and adjust to fluctuations in the cost of capital, (vi) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS’ loan portfolio, (vii) continue to realize production efficiencies at its production facilities and manage operating costs including materials, labor and overhead, (viii) manage production capacity and production changes, (ix) provide products, services and experiences that are successful in the marketplace, (x) develop and implement sales and marketing plans that retain existing retail customers and attract new retail customers in an increasingly competitive marketplace, (xi) sell all of its motorcycles and related products and services to its independent dealers, (xii) continue to develop the capabilities of its distributor and dealer network, (xiii) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations, (xiv) adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices,  (xv) adjust to healthcare inflation, pension reform and tax changes, (xvi)  retain and attract talented employees, (xvii) detect any issues with our motorcycles or manufacturing processes to avoid delays in new model launches, recall campaigns, increased warranty costs or litigation, (xvii) implement and manage enterprise-wide information technology solutions and secure data contained in those systems, and (xix) successfully integrate and profitably operate MV Agusta Group.

In addition, the Company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are described in risk factors that the Company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current turbulent capital, credit and retail markets and our ability to adjust to the recession.

The Company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company’s independent dealers to sell its motorcycles and related products and services to retail customers. The Company depends on the capability and financial capacity of its independent dealers and distributors to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company. In addition, the Company’s independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors.

 

Figures from the Motor Cycle Industry Association (MCI) reflect the resilience of the motorcycle market in the economic downturn, ending 2008 just 4,866 registrations short of 2007.

A total of 139,715 motorcyles, mopeds and scooters were registered in 2008, only 3.4 per cent down on 2007. The figures for December showed a 19.1 per cent decline to 6,706 registrations for the month. The UK car market plunged 11.3 per cent last year.

Beneath the headline figures, some significant trends are emerging. Mopeds ended the year 1.5 per cent up, suggesting increasing ‘utility’ use by commuters and those with relatively short journeys. Scooter registrations were also 1.1 per cent up, and the adventure sport and touring categories increased by 5.7 per cent and 8.6 per cent respectively.

“With a robust performance very close to 2007, the motorcycle market and industry is providing further evidence that powered two-wheelers offer a credible and very affordable transport option,” said the MCI’s Sheila Rainger. “We will all continue to face financial pressures in 2009, and with rail fares increasing by as much as 11 per cent and incentives such as bikes being able to use bus lanes, motorcycle use is more relevant and practical than ever.”

Consumer needs have moved towards the wider use of motorcycles for practical everyday purposes, as well as fun and freedom. This is reflected in a fall in market share of the high performance supersport sector which now accounts for under 17 per cent of the market.

The year’s top selling model was the Honda CBR 1000RR, but as further evidence of motorcycling’s relevance, five of the best-selling models of the year were small-capacity motorcycles, mopeds and scooters with engines of less than 125cc. The biggest-selling manufacturer in 2008 was Honda with 20,107 registrations, followed by Yamaha (17,031) and Suzuki (16,132).

Sheila Rainger added: “There was a big increase in motorcycle tests in 2008, and dealers selling new and used bikes to people taking to two wheels for the first time. The industry is well-placed to offer people a cost and congestion-busting alternative for everyday transport and this year, we will be campaigning hard to urge people to join in, as well as working to increase safety and transport provisions for motorcyclists.”

Marshals attend the biggest events on the motorcycling calendar. Without marshals these high level races cannot run and that is why they are essential within the racing world. If you take on a marshalling role you could very well find yourself trackside at world motocross, MotoGP, World Superbikes, British Superbike or some straight forward club racing. You are guaranteed the best vantage points, you will be close to the action and get to meet the riders although they may not be feeling very talkative!

Being a marshal is a very responsible position and to make sure you know all you need to carry out your duties safely, the ACU Motorcycle Marshals Association is running a number of training days early this year.

The training course, which is completely free, will take you through different aspects of the job from fire training, flag theory and practical, medical training, to incident theory and practical. By the end of the day you will be competent in the basic skills needed to be a marshal ready to get out and help make motorcycle sport happen.

The ACU Motorcycle Marshals Association is delighted to announce the following dates and venues for marshal training days:

Sunday 8th February 2009 – Donington Park

Sunday 15th February 2009 – Lydden Hill

To book the above courses and set yourself up as a marshal for 2009 please contact Michelle Haynes on 01788 566405 or email [email protected]

It is with huge regret that Big D's will be closing on Sunday 8th February.

Due to mounting debt that in the current financial climate that no-one is willing to wait for.

All memorabilia both within the pub and outside, including the 8ft Alien, will be auctioned off on Sunday 8th February @ 4pm.

The Biking community will be very sad to see Big D's close and wish Big D and Rosie all the best for the future.